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Student Loans for International Students: A Complete Guide

Australia is known for its recognized schools, colleges, and universities which grab the attention of students from all over the world. However, when it comes to living and studying in the country, students need sufficient money to pay for their expenses.

Applying for a student loan in Australia is simple today, and every student should take advantage of it. However, you need to keep certain things in mind before applying for a student loan.

The student loan system in Australia is called HELP (Higher Education Loan Program). It is an initiative by the Australian government that offers financial aid to students so that they can fund their education. Unfortunately, international students are not eligible for HELP, but there are other sources through which they can get student loans. Here are two of them:

Universities

Private Banks

Keep in mind that you not only have to cover tuition fees but also other expenses, including, boarding, housing, insurance and general living expenses. So, be wise and spend some time to evaluate your financial needs before getting to a loan.

Australian universities provide this type of loan to students who suddenly face a shortage of money. It is one of the interest-free student loans in Australia, and you don’t need a guarantor to avail this loan. You have to repay this loan by the deadline agreed upon, but if you fail to do so, an interest rate of 2.5% will be applied.

To be qualified for this loan, you need to be a full-time student at an Australian university. Also, some universities may even require your current financial details to apply for the loan.

Through this loan, you can expect to get up to $1500 in cash.

Secured Personal Loan

To get this loan, you need to provide the bank guarantee by attaching an asset to your loan such as a car or any other valuable property. The interest rate for a secured personal loan can be variable or fixed, but it is usually low. If you fail to pay the loan on time, the asset you’ve attached to the loan will belong to the bank.

Unsecured Loan

With this type of loan, you don’t have to give any collateral in exchange for the loan offered. But you will have to pay a higher rate of interest, which can get really expensive. All in all, the unsecured loan is flexible, and you can use it for a variety of purposes.

Long-term or General Purpose Loan

This loan is provided by both private banks and universities. It covers different expenses, apart from your tuition fees such as the cost of living, travel expenses, and more. As different banks offer this type of loan, you can borrow a larger amount than emergency loans.

You can get a general-purpose loan of up to $4000 to $8,000 from a university, and you can borrow a higher amount from a bank. Remember, universities provide interest-free general purpose loans, but you need to pay interest to the bank.

Medical Student Loan

A medical student loan in Australia can be used by a student who is pursuing a medical or dental degree. If you can fulfil the qualification criteria, you can obtain this loan in your final year or use it to pay for your tuition fees or other expenses like the cost of living, debts, and more.

Car Loan

There are many lenders in Australia that offer car loans to international students. However, the catch here is that the car you purchased will be attached as collateral to your loan. The rate of interest for this type of loan is highly competitive.

Payday Loan

Payday loans are a type of short-term emergency loan provided by banks in Australia. You can get this loan if you have a part-time job, a poor credit history, or are a benefit recipient. With a payday loan, you are allowed to borrow a small amount of money.

5. Top Private Student Loans available for International Students

Here are the top two private student loans offered by banks in Australia:

Westpac Unsecured Personal Loan

The Westpac unsecured loan can be used to buy a car, travel, manage your debts, etc. This loan requires you to meet the following eligibility criteria:

You must be 18 years of age or above.

You must have approved employment in Australia

You need to have a regular or permanent source of income.

You should have an acceptable visa or need to be a permanent resident in Australia.

Information required by the bank:

Name, phone number, and address of the current employer.

Any running debts

Investment details

Weekly details of after-tax income

Details of everyday expenses

ANZ Fixed Rate Personal Loan

You can use ANZ student loans in Australia to buy a car, repay your debts, travel or renovate your home. With this type of loan, the minimum amount that you are allowed to borrow is $5000. This loan requires you to meet the following eligibility criteria:

You need to be 18 years of age or above.

You should be employed, and your job should pay you a minimum of $15,000 per year.

You need to have a valid visa or be an Australian resident.

Information required by the bank:

ANZ account number (if you have one)

A copy of driver’s license (if you have one)

Employment and income details

6. How to Repay your International Student Loan in Australia?

There are different rules and regulations to repay your short term and long-term loans in Australia. Let’s have a look:

Terms and conditions for repayment of short term loans:

You must repay the amount within a period of six months from the date the loan was approved.

If the amount of loan is higher than usual, you might be allowed to pay the loan within one year (this is only valid for exceptional circumstances).

You can repay the loan in the form of an online payment, cheque, cash, or money draft.

If you fail to repay the amount within seven days of the due date, a specific rate of interest will be applied, which may vary depending on your university.

Failure to pay the loan on time will have a negative impact and can add to your debt.

Terms and conditions for repayment of long term loans:

You can repay long-term loans in fortnightly or monthly instalments, depending on what is agreed.

You need to pay the amount in full as soon as your course duration is over.

You can pay long-term loans in the form of online payments, cheques, or money drafts.

If you fail to pay the university loan on the scheduled date, you may not be allowed to obtain your documents from the administration of your university, and you will also not be permitted to see the end results.

An interest rate of 12% per annum may apply if you fail to pay the loan amount to the university.

For long term bank loans, you may be allowed to repay the amount after graduation or a year or two after you graduate.

If you fail to pay university long-term loans on time, your guarantor (parent, relative, or friend) will be asked to repay the loan on your behalf.

If anything regarding obtaining or repaying a student loan in Australia is not clear to you and you have doubts, you should consult your financial advisor or the faculty of your university. You can even take guidance from previous graduates of your university who had taken a loan.